I just received an email from a past client who's about to go through a foreclosure on a house I sold him (email below). He's also a friend. I'm not really sure how to answer him, but I really don't think there are criminal ramifications to the plan he outlines below. Civil, maybe. How would you answer this email? Any of you ever heard of a situation like this?


...foreclosure on the home you sold us is eminent. (Name redacted) and I have accepted it. Even embraced it. We've made other living arrangements with which we are happy. Suffice to say that although we've unsuccessfully attempted a loan mod arrangement, the fight is now over and we're simply walking away.

However, the thought recently occurred to me that I could monetize this situation. Setting aside morality issues for a second, I'd like to pose a question in a legal light: Can I go ahead and cancel my insurance policy during the pre-foreclosure process and pocket the money without legal repercussions? Have you ever heard of any of your past clients doing this? Or anybody for that matter?

Now, there are a few facts that about our specific case which may influence the answer to this question.

1) This loan is with BOA.

2) Our insurance is escrowed.

3) Due to the length of our non-payment, there wasn't any money in our escrow (in fact, it was negative) when BOA paid our insurance on our behalf. (This fact gives me pause for consideration with regard to going through with the cancellation).

4) This is not a forced policy. It's with the insurance company we originally chose.

5) I'm not concerned about coverage on our contents since we will be vacating very soon.

6) We have not yet been served, but I know it's forthcoming soon due to a form letter that I recently received. Plus, we haven't made a payment in a REALLY long time.

So what do you think? Would there be any potential criminal repercussions? Or just civil? Also, can I be assured that if I cancelled the policy that the refund check would come to us? Is it possible that when BOA paid this out of their pocket (due to no money in my escrow), they alerted the insurance company that if the policy is cancelled to send the refund to them?